JERUSALEM  Underneath the homes and ragged streets of the Palestinian neighborhood of Silwan lie the remnants of a glorious Jewish past: coins, seals, a water tunnel hewn by a Judean king 2,700 years ago, a road that led to a biblical Temple.

But archaeology is hard-wired into the politics of modern-day Arab-Israeli strife, and new digs to unearth more of this past are cutting to the heart of the charged argument over who owns the holy city today.

Israel says it's reconnecting with its ancient heritage. Palestinians contend the archaeology is a political weapon to undermine their own links to Jerusalem.

Lying on a densely populated slope outside the walled Old City, the area is known to Israelis as the City of David, named for the legendary monarch who ruled a Jewish kingdom from this spot 3,000 years ago. It is the kernel from which Jerusalem grew.

But Silwan is in east Jerusalem, which Israel captured from Jordan in 1967 and which Palestinians claim for the capital of a future state.

Palestinians and Israelis are trying again to negotiate a peace deal, one which must include an agreement to share Jerusalem. The collision in this neighborhood -- between Silwan and the City of David -- encapsulates the complexities ahead.

The organization funding the digs, the Elad Foundation, is associated with the religious settlement movement and is committed to preventing Israel from ever ceding the area in a peace deal. It says it has a yearly budget of close to $10 million, nearly all of it from donations, and is buying up Palestinian homes in Silwan to accommodate Jewish families. Around 50 have moved in so far, living in houses flying Israeli flags and guarded by armed security men paid for by the Israeli government.

At the same time, the City of David digs have expanded through the neighborhood, carried out by respected Israeli government archaeologists with funding from Elad.

Fakhri Abu Diab, a neighborhood activist, said the Elad Foundation has made it clear that he and his neighbors are in the way.

"They want the land without the people," he said.

None of the finds that the archaeologists highlight for the public are from the eras of Christian or Muslim rule. "They are looking only for Jewish ruins," said Abu Diab. "It's as if we're not here."

Elad denies having any intention of driving out Silwan's Palestinians. "There will always be Jews and Arabs living together here," said Doron Spielman, Elad's international director of development. Dozens of Silwan Arabs are employed by Elad, he said, and the foundation's activities include neighborhood beautification projects which improve life for Palestinian residents.

Still, he said, "We do not deny we have a Zionist dream -- to reveal the ancient city beneath the ground and create a thriving Jewish neighborhood above the ground."

More than 160 feet under Silwan on a recent afternoon, a visitor walked for half an hour in darkness and knee-deep water through Hezekiah's tunnel, the stillness disturbed only by a party of South American tourists bellowing the theme song from the "Indiana Jones" movies.

The Old Testament books of Kings and Chronicles recount the tunnel's origins: Hezekiah, king of Judea, dug it to channel water inside the city walls ahead of a siege by Assyrian armies.

Measuring 1,750 feet long -- about a third of a mile -- the tunnel was dug around 700 B.C. by two teams that started from each end and met in the middle, an engineering feat brought to life by their chisel marks, still visible on the walls, and recounted in an inscription they mounted on the wall.

"The City of David shows us the history and archaeology of Jerusalem since the day it was founded. Jerusalem's foundations are here," said archaeologist Eli Shukrun, standing near the entrance to another tunnel -- a long, dank-smelling Roman-era sewer through which Jews fled Jerusalem as it was torched by Rome's legions in 70 A.D.

The sewer ran beneath a road that led up to the Second Temple, the center of the Jewish faith, destroyed in the same Roman assault.

Roni Reich of Haifa University, another City of David archaeologist, gives voice to the history pulsing through Jerusalem, reeling off the names of history's giants associated with the city -- David, Jesus, the Roman Emperor Constantine, the Muslim ruler Saladin.

"It's hard to list another city similar to this one," he said. "And this hill is where it all started."

The dig regularly yields important and colorful finds such as 2,500-year-old pins used to hold robes closed, and seals stamped with the names of Yehochal ben Shlemiyahu and Gemaryahu ben Shafan, two figures mentioned in the biblical book of Jeremiah.

Archaeologists not connected to the City of David digs don't dispute their importance.

Amihai Mazar, a professor at Hebrew University in Jerusalem, said the site has already revealed important details of Jerusalem's history. He mentioned the discovery of massive Canaanite fortifications 3,700 years old and of thousands of fish bones indicating the diet favored in this landlocked city on the desert's edge.

"This site doesn't stop surprising us," Mazar said.

The archaeologists at the site say their work has nothing to do with politics. But others charge their colleagues with complicity in Elad's agenda of moving Jews to the Arab neighborhood.

The City of David dig "is connected by its umbilical cord to politics," said Rafi Greenberg, an Israeli archaeologist from Tel Aviv University who dug at the site in the 1970s and 1980s, before Elad was involved.

"No amount of dealing with ceramics and rocks can obscure the fact that the work is being done to establish facts in the present," he said. He rejected his colleagues' claim to academic neutrality, saying: "They are being compensated for their cooperation with findings and money."

Reich said the people paying for the dig haven't interfered in his work. "I can divide the political from the archaeological," he said. "The people from Elad have never affected our archaeological judgment."

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.